Wednesday, April 2, 2014

The War on Poverty — $21 Trillion Later

Fifty years and trillions of dollars after the “War on Poverty” was launched, Americans aren’t much better off, according to a study published by Republican reformers in Congress.

The War on Poverty has barely made a dent in poverty, said the 205-page report unveiled by the House Budget Committee, which is chaired by Rep. Paul Ryan (R-Wisc.). The report was created in the hope of starting a discussion in Congress about reforming poor-relief programs.

In 1965, the poverty rate was 17.3 percent. In 2012, it was 15 percent. This means taxpayers blew a staggering $20.7 trillion over the last half century in order to achieve a paltry 2.3 percentage point decrease in poverty.

Those on the Left consider this to be social progress by way of coercive redistribution. Mere results have always been less important to the Left than intentions.

Although a sane person would consider the minuscule reduction in poverty a humiliating defeat, left-wingers have successfully been changing the subject, moving the discussion away from their policy failures for 50 years now.

It began back in the Sixties, when instead of being satisfied with New Deal-era programs like Social Security, left-wingers resolved to move America even farther away from its founding ideals, fundamentally changing the country by erecting a supremely sclerotic behemoth welfare state answerable to no one.

The War on Poverty itself was a part of the massive left-wing social engineering and vote-buying scheme known as the Great Society. This war really should have been called the war on American values. As a result of misguided government policies that grew out of the War on Poverty, out-of-wedlock birthrates have mushroomed, David Horowitz and John Perazzo reported in “Government vs. the People.”

Despite an orgy of federal spending, blacks and other minorities have suffered the most from big government poverty alleviation efforts. The anti-marriage, anti-family tilt of welfare policies has devastated black communities.

In his first State of the Union address on Jan. 8, 1964, President Lyndon Johnson ushered in a half-century of government-incentivized sloth, indolence, dependency, and social decay. He exhorted Congress to launch a new belligerency against a perpetually ineradicable foe.

“Let this session of Congress be known,” Johnson exclaimed, “as the session which declared all-out war on human poverty and unemployment in these United States.”

The Economic Opportunity Act (EOA) of 1964 became the centerpiece of the new war. It expanded the nation’s social safety hammock, turning government resources into war materiel to be used against the American system of constitutionally limited government.

The War on Poverty gave taxpayers’ money to so-called community groups like ACORN and Saul Alinsky’s Industrial Areas Foundation in order to encourage them to agitate against the status quo.

This, in turn, stimulated demand for more government spending as taxpayer dollars became a kind of ever-increasing subsidy for pro-big government activism. The federal government still hands out significant grants to left-wing groups to subsidize their efforts to take away our economic freedoms.

Many of the EOA-created programs still exist today, including VISTA (Volunteers In Service To America), now known as AmeriCorps VISTA, Job Corps, and Head Start.

Many more excuses for handouts were created after the mid-1960s — so many, in fact, that it is difficult nowadays for poor people to tiptoe through the ever expanding minefield of government assistance unscathed.

Calls for yet more welfare spending continue unabated from the echo chambers of the Left, whether the national economy is good or bad.

These calls come even after the country has saturation-bombed poor people with welfare over the past 50 years, to the tune of $20.7 trillion in 2011 dollars, far exceeding what the U.S. has spent on every actual, non-figurative war it has fought. Federal and state welfare spending, adjusted for inflation, is now 16 times greater than when this phony war was declared, according to Robert Rector of the Heritage Foundation.

While millions of Americans remain stuck in poverty, the committee report inventories a dizzying array of expensive failed programs on which mountains of money have been lavished.

The federal government now administers at least 92 federal programs designed to help lower-income Americans. There are dozens of education and job-training programs, 17 different food-aid programs, and over 20 housing programs. The federal government spent $799 billion on these programs in fiscal 2012 alone, according to the report.

Among more than 15 programs, more than $100 billion was spent on food aid. More than $200 billion was spent on cash aid. Spread over more than 20 programs, more than $90 billion was spent on education and job training. Almost $300 billion was spent on health care and close to $50 billion was spent on housing.

Let’s look at some of the eye-popping numbers involved in the major aid category of cash aid.

There were three federal agencies involved in spending $220 billion on cash aid in fiscal 2012. They are the Social Security Administration, Department of Health and Human Services, and Department of the Treasury.

Created in 1974, the Supplemental Security Income program provides cash benefits to elderly, blind, or disabled persons with limited income and assets. It weighs in at $50 billion.

Temporary Assistance for Needy Families (TANF), created in 1935, provides assistance to needy families. In 2012 it weighed in at $16.7 billion.

The Earned Income Tax Credit, established in 1975, provides cash assistance to low-income working families. The EITC, which some analysts consider to be a rare federal anti-poverty success, is the largest measure in the tax code that is aimed at reducing poverty. In 2012, its budget was $59 billion.

The Child Tax Credit, enacted in 1997, provides assistance to families with children. The IRS spent a little over $57 billion on total child credits in 2013.

The Title IV-E Foster Care/Adoption Assistance program, created in 1997, helps states pay for arranging temporary homes for disadvantaged children or for facilitating their adoption. The federal government spent $6.8 billion on the program in 2012.

But most of the 92 federal poverty-alleviation programs have a mediocre to downright awful track record of helping people in need.

To make matters worse, over the past three years, “deep poverty” has reached its highest level on record and about 21.8 percent of children live below the poverty line, the report states. Although changing demographics and slow economic growth contribute to continued poverty, federal policies are also discouraging work. For example, a rapid increase in disability caseloads has shrunk the labor force.

“But a large problem is the ‘poverty trap,’” the report states. “There are so many anti-poverty programs—and there is so little coordination between them—that they often work at cross purposes and penalize families for getting ahead.”

Because these programs are means-tested—meaning that benefits fall as recipients earn more money—poor families face very high implicit marginal tax rates. The federal government, in effect, is discouraging them from making more money.

“Congress has taken a haphazard approach to this problem; it has expanded programs and created new ones with little regard to how these changes fit into the larger effort. Rather than provide a roadmap out of poverty, Washington has created a complex web of programs that are often difficult to navigate.”

Some programs work, some don’t, and with many of them, “[t]here’s little evidence either way.”

Federal programs are not only failing to address problems in society; in some ways they are making the problems worse. “Changes are clearly necessary, and the first step is to evaluate what the federal government is doing right now,” the report said.

But President Obama, neo-Marxist ideologue that he is, isn’t interested in making changes to anti-poverty programs. Obama is seeking $56 billion in new spending for a variety of programs expanding educational offerings for preschoolers and job training for laid-off workers. No doubt he’ll find a way to lard still more billions of dollars in so-called emergency spending onto the budget as they year progresses.

“The two sides have converged in terms of the problems they’re diagnosing,” said Alan D. Viard of the American Enterprise Institute. “But the solutions are very far apart.”

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About Me

An award-winning investigative journalist, Matthew Vadum is senior editor at Capital Research Center. His work is cited by Fox News, Weekly Standard, Wall Street Journal, USA Today, and many other media outlets. He's been on "The O'Reilly Factor," "CBS Evening News," "The Daily Show," and "The Colbert Report," and denounced by Al Sharpton, Oliver Stone, Roseanne Barr, and Keith Olbermann. Michelle Malkin hailed Vadum for having "the foresight and insight to report on the [ACORN] story when nobody else would." Glenn Beck said he finally "got it" when Vadum appeared on his Fox TV show to talk about ACORN, helping him draw one of his famous tree diagrams. Vadum "writes some of the harder edged and more influential briefings" in the conservative movement (Washington Post) and is a “conservative data hound" (Washington Independent).
Vadum is also Adjunct Scholar at the James Madison Institute. His report galvanized opposition to liberals' campaign to force a kind of affirmative action onto private grant-makers in Florida. According to National Review, it convinced the Florida legislature in 2010 to pass SB0998 which outlawed the "ACORNization" of philanthropy in that state.